Charter Sells Cable Systems, Reports Q4 Loss

Feb 28, 2006  •  Post A Comment

Charter Communications, looking to pare down its debt and shed noncore assets, announced Tuesday that it reached an agreement to sell cable systems to two smaller cable companies for a combined total of $896 million. Charter also reported a fourth-quarter loss that was largely unchanged from last year, with a 5 percent increase in revenue.

The sales involve 316,000 basic-cable customers in Virginia, West Virginia, Illinois and Kentucky, and are expected to be completed in the third quarter.

The Virginia and West Virginia properties were sold to a company owned by Cequel III, a cable management company that has as its CEO former Charter chief executive Jerald Kent. The Cequel III sale involves about 240,000 basic subscribers.

The Kentucky and Illinois properties were sold to New Wave Communications and involve around 76,000 basic-cable subs.

“The sale of these systems is consistent with our strategy to divest of geographically nonstrategic assets,” said Charter CEO Neil Smit in a statement. “We will continue to assess opportunities to optimize our portfolio to enhance overall operating efficiency.”

The company’s fourth-quarter loss was $336 million, compared with a year-earlier loss of $339 million. Revenue was up 5 percent to $1.3 billion, driven by strong growth in telephony and high-speed data, which outpaced video revenue.

For the year, Charter reported a narrowed loss of $970 million, compared with red ink of more than $4.35 billion a year earlier. Revenue was up nearly 6 percent to $5.25 billion.